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How we’re spending $55,930.08 a year on SaaS products

blog.sawhorsemedia.com

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Re: How we’re spending $55,930.08 a year on SaaS products

#31

Post by Alupis »

teacup50 wrote: post #19
kitsune_ wrote: post #17

Earlier quoted context omitted.

> IT systems are not a full time job for a startup. They're not even a part time job. They're an every-once-in-a-while type job. All you need is one engineer that can also run a single small internal server. Just one. Soon enough he or she will have to maintain your mail server, CRM, file server, bug tracker, CI service, backup services etc. and woops, your developer is now a sysadmin.

From experience: That level of maintenance only grows to sysadmin proportions at a scale where you can hire a sysadmin. These systems largely run themselves, indefinitely.

Not to mention there's a lot of SysAdmins out there that will do the job very well for a lot less than $60K a year. You don't need to hire a SysAdmin who used to work on Google sized infrastructure to run your internal startup's IT.

Re: How we’re spending $55,930.08 a year on SaaS products

#32

Post by karthikv2k »

vv wrote: post #8
joelhaasnoot wrote: post #5

While interesting - there's often a free or opensource alternative for these "generic" SaaS services. You'd probably be spending just as much on this list if you used no SaaS products and hired an engineer to either maintain the open source versions or add similar custom functionality to your product/CMS/dashboard/somewhere. If you hired the engineer, you'd probably get the exact functionality you needed too.

We have engineers and we already spend a lot more on them than we do on SaaS. But we want them focused on building Muck Rack into an awesome PR tool for our customers, not internal tools unless they're specific to our product. Even so I don't think there's any engineer we could hire for $60k salary (or any salary for that matter) who could effectively maintain all of the functionality we get from these products, but…

Salary is just a part of the total cost of an employee. You have to take into account: recruiting, office space, food, medical insurance, payroll tax, stock options, etc. Usually these things will be equivalent to the salary.

Re: How we’re spending $55,930.08 a year on SaaS products

#33

Post by _delirium »

eitally wrote: post #29
mmahemoff wrote: post #28

It's significant this is a SaaS company using these services. Some of the services have a cost based on team size, while others have a cost based on user base (and usage volume). Services whose cost is f(team size): CircleCI, Trello, Github Services whose cost is f(user base): MixPanel, Moz, Shopify I mention this distinction because the f(team size) services generally offer solid value to any team, being useful and…

And this is precisely why many large enterprises build things in house rather than license commercial tools. It's a lot more palatable to buy 3-5 full time developers to build and support and internal helpdesk than license ServiceNow, etc, for tens of thousands of users.

There's also considerable risk-aversion at large enterprises. Getting themselves into a position of significant dependence on a SaaS provider can be unappealing for at least two reasons, even if the pricing works for them initially: 1. risk that the pricing gets raised significantly, or the business's employee/customer profile changes in a way that raises the price to them significantly; or 2. risk that the SaaS provider goes out of business, is acquired, pivots, or otherwise significantly changes the service.

Building something in-house probably doesn't usually result in a better product up front (and definitely not for less up-front expenditure), but it can reduce some risks and be less constraining to future moves if you own the app.

Re: How we’re spending $55,930.08 a year on SaaS products

#34

Post by mattm »

chatmasta wrote: post #24

I'm more certain every day that there is a place in the market for a company offering "subscription management" service. Manage all SaaS for a business (or personal as well!), keeping costs low and utilization high. Provide one central billing endpoint. I would definitely use a service like that, both personally and professionally. The number of subscriptions I have is growing, and it's frustrating to keep up with al…

Actually, this is a pretty good idea! It's going on my idea list.

Re: How we’re spending $55,930.08 a year on SaaS products

#35

Post by joelhaasnoot »

vachi wrote: post #6
joelhaasnoot wrote: post #5

While interesting - there's often a free or opensource alternative for these "generic" SaaS services. You'd probably be spending just as much on this list if you used no SaaS products and hired an engineer to either maintain the open source versions or add similar custom functionality to your product/CMS/dashboard/somewhere. If you hired the engineer, you'd probably get the exact functionality you needed too.

ahh what!!!! did you see the amount of services provided?? could you please support your statement with some logic

So $55k isn't really enough to hire an engineer, but generally speaking many of these services can be setup in a day or two based on open source software or other free tools. I wonder if you made a clear business case based on the features you need, what the result would be. That being said, not having to run it is worth something.

Re: How we’re spending $55,930.08 a year on SaaS products

#36

Post by corkill »

Alupis wrote: post #26
cm2012 wrote: post #23

Earlier quoted context omitted.

Paying someone to micromanage the services to get cost savings would cost at least $60,000 a year and make the company lose focus. There's no way digging into the details of the Mailchimp spend structure, for instance, is worth the time.

> There's no way digging into the details of the Mailchimp spend structure, for instance, is worth the time. Actually that's one point where you are not correct. For a good email campaign, it's imperative that you manage your list. You need to be looking at stats from the previous campaigns and making changes for future campaigns. If you have a lot of low-engaged/no-engaged emails, you need to try to re-engage them a…

They aren't trying to reduce costs, they are trying to focus on their product and growing their company.

Re: How we’re spending $55,930.08 a year on SaaS products

#37

Post by Alupis »

digital-rubber wrote: post #16
simonw wrote: post #12

Earlier quoted context omitted.

$60k/year is 1/3 to 1/2 a developer/sysadmin. If maintaining in-house systems based on open source equivalents of all of those packages would take more than 1/2 a headcount, then they are making the right choice. And even if they could do it all in-house, that's a developer who's not working on the stuff that makes their product distinctive. Running your own email sending / file sharing / customer support tracking /…

yes that's the tradeoff/investment, where people differ of opinion and I (very technical person, not management/paper pusher), find it more important to have in-house capabilities (even at higher cost) then to simply rely on a third party vendor. Plus that you are not making any third party aware of anything, as you don't need them. And might save you a lot of hassle in the middle of the night and you need vendor sup…

I don't know why so many people keep tossing the $60K-$120K figure around for a SysAdmin. Your startup is not on the level of a Facebook/Google and does not need a SysAdmin who's background is managing systems at that scale. You really just need a college student who can run a few small servers and knows how to make backups for when things hit the fan. We're talking $15-$20 an hour, they get a lot of great work experience, and you get manged in-house IT.

Re: How we’re spending $55,930.08 a year on SaaS products

#39

Post by vv »

eitally wrote: post #29
mmahemoff wrote: post #28

It's significant this is a SaaS company using these services. Some of the services have a cost based on team size, while others have a cost based on user base (and usage volume). Services whose cost is f(team size): CircleCI, Trello, Github Services whose cost is f(user base): MixPanel, Moz, Shopify I mention this distinction because the f(team size) services generally offer solid value to any team, being useful and…

And this is precisely why many large enterprises build things in house rather than license commercial tools. It's a lot more palatable to buy 3-5 full time developers to build and support and internal helpdesk than license ServiceNow, etc, for tens of thousands of users.

There are risks to building in house too: Things will break over time Key programmer leaves, no good documentation or succession plan left behind New needs will arise (e.g. if you built an expense tracking app before smartphones, you'll now need to build a iPhone/Android app) Maintaining security - is your security team really better than the outsourced service's? API support Developer ecosystem

There's always a build vs. buy decision and sometimes you should build, but this is why even huge companies use Salesforce over maintaining an internal CRM.

Re: How we’re spending $55,930.08 a year on SaaS products

#40

Post by timjahn »

chatmasta wrote: post #24

I'm more certain every day that there is a place in the market for a company offering "subscription management" service. Manage all SaaS for a business (or personal as well!), keeping costs low and utilization high. Provide one central billing endpoint. I would definitely use a service like that, both personally and professionally. The number of subscriptions I have is growing, and it's frustrating to keep up with al…

I thought about this too last year. Such a service could also audit your services list every so often and ask you if you're still using them. If not, they could remind you to cancel or cancel for you, saving you money.
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